As sales stagnate, Kohl’s eliminates 3 high-level jobs

Shake-up comes a week after report sent stock tumbling

Kohl’s Corp. has eliminated three high-level corporate positions as the company continues to search for ways to revive sluggish performance and rekindle growth.

The shake-up comes just one week after the retailer reported lackluster sales in the fourth quarter and sliced its 2015 earnings projection — announcements that pushed the firm’s stock price down nearly 19% in a single day.

Also looming in the background is the report last month by The Wall Street Journal that Kohl’s directors were considering whether to hire an investment bank to explore alternatives that could include sale to a private equity firm.

Now gone from the Menomonee Falls-based company are Krista Berry, executive vice president and chief digital officer; Bevin Bailis, senior vice president for communications and public relations; and Paul Calderon, senior vice president for store environment.

CEO Kevin Mansell disclosed the moves Thursday in an internal email to employees that was obtained by the Milwaukee Journal Sentinel. Kohl’s spokeswoman Jen Johnson confirmed the email Friday.

With only modestly higher sales in 2015 and profits that “fell far short of plan,” Kohl’s is “not getting to the results we want as fast as we should,” Mansell said in the email.

Seeking to accelerate the company’s progress toward goals embedded in its “Greatness Agenda” — an ambitious plan to lift sales from the

$19 billion in 2014 to $21 billion in 2017 — Mansell said the latest changes would help make Kohl’s more nimble and position it to work faster and deliver “projects that resonate with what today’s consumers demand.”

Like other brick-and-mortar merchants, the 1,165store, nationwide chain is wrestling with the rise of online retailing, and with what many industry observers see as a trend that has consumers spending less on apparel and more on experiences and electronics.

Kohl’s remains profitable, but its revenue has been almost flat since 2012, and its net margin has been shrinking.

The 1% overall sales gain in 2015 does little to move the company toward its $21 billion goal. In fact, similar performance over the next two years would leave Kohl’s with sales of only about $19.6 billion in 2017.

In an interview, Johnson, the company’s vice president for corporate communications, described the personnel changes as “back-ofthe house reorganization.” Like Mansell in his email, she said the intent is to structure Kohl’s teams “in a way that would make us a faster, more agile organization.”

The three positions will not be filled, she said.

Of the three, Berry ranked highest in the corporate hierarchy, as one of about a dozen executive vice presidents. She was not part of Kohl’s uppermost management group — Mansell and four others who constitute the firm’s operating committee.

Senior vice presidents are much more numerous. Last August, during a court hearing on Kohl’s unsuccessful attempt to keep chief information officer Janet Schalk from bolting to Hudson’s Bay Company, an executive testified that Kohl’s had more than 40 senior vice presidents.

Kohl’s has undergone still more-significant management changes since 2012, after poor sales performance the previous Christmas and subsequent inventory problems presaged the disappointing results the firm has posted since.

The company’s chief marketing officer left in the second half of 2012, and its chief administrative officer, one of the three most highly paid executives at the time, resigned in mid-2013.

The following March, Kohl’s announced that its chief merchandising officer — a critical position for any retailer — had resigned. The departure of that executive, Donald Brennan, also one of the Kohl’s most highly paid people, came after the board of directors rated his performance as “inconsistent,” the second-lowest ranking on the company’s scale.

After a longer-than-expected vacancy, Kohl’s last June named Michelle Gass to the chief merchant post. A former Starbucks executive, Gass joined Kohl’s in June 2013 as chief customer officer. She retains most of her previous responsibilities.

Gass is considered a potential successor to Mansell, as is the company’s recently installed chief operating officer, Sona Chawla.